Why isn’t there a definitive checklist of what you need to do when you start your business?
As I got my business started, that question crossed my mind many times!
The more I learned, the more I realized that it's because everybody has their own idea of what belongs on that checklist.
After a few years in business and having built a pretty decent business, I figured I'd share my top tips for your first year as a small business owner.
1: Get Your Pricing Right
So many small business owners that I talk to are way under priced.
They aren't set up to scale or to grow. They forget that you need to cover expenses, profit margins, taxes, commissions, or marketing. Often, small business owners set a product price at perhaps double the cost (E. G., glasses costs $20 to make therefore selling them at $40). But that doesn’t leave you any room to grow or hire on other people to help you create and distribute the product (If your service is a product).
Here’s how to get your price right: start thinking about your pricing and check your pricing compared to the Profit First model taught by Mike Michalowicz.
The Profit First Model:
If you can't afford to take 10% for profit, 15% for taxes, 10% for marketing or commissions, and still be able to pay any other expenses related to the service, you’re not priced right. Set your pricing up so you are taking a profit on top of all your expenses from the get-go. Find ways to lower your cost of goods if necessary, or build the brand that can support a higher price point. Otherwise, you’ll never grow!
Quick side note…
As you're getting started in business, it’s ok to price down to attract clients. Just mark the retail price and explain the discount to your customers. Until you develop your brand or reputation, it will be difficult to get people to pay top dollar like they would for a Ferrari!
Just know where you NEED to be in order to create a scalable business.
2: Chill Out About The Website
Too many new business owners freak out about getting the perfect website.
The problem is that your first website isn't going to be perfect, so you don't need to spend a ton of money or time to get it up and going.
You don't need two hundred (or event 10!) pages on your site. You’re looking to create a placeholder that says, “Hey, I'm legit, I'm real, you can trust me.”
You're going to get that first website up and you're going to make changes. It's going to be three or four websites in before you understand what you really want and how to craft a website that truly represents your company once it’s an established company. So don’t waste money building a gigantic website you probably won’t keep for very long.
3: Don't Invest Boatloads of Money in Marketing
Marketing is meant to fuel your sales funnel.
Your sales funnel is the process a lead follows to go from a cold lead (a name and contact information) to identify which leads are prospects, and what the first step is for the prospect, and the second step, and third, all the way to becoming a client.
A speaking engagement which offers a freebie in exchange for your contact info.
A follow-up offer designed to weed out which leads are interested in coaching versus just wanted the freebie.
Calling all of the individuals who opted in for the second offer to set an appointment.
Selling them into a discovery session on that appointment.
Selling them into an ongoing coaching program from that discovery session.
I spoke with a lady last year who had spent literally thousands of dollars per month on ads driving people into her initial freebie. Her struggle? She didn't bother testing that that funnel actually converted. She ended up with a ton of leads who wouldn't answer her phone calls, would not open her emails, and had no clue who she was because they opted in off an ad. She had a great little giveaway, but it didn't build her any actual conversions.
She literally spent tens of thousands of dollars to get nothing.
Before you start blowing your money on marketing ads and videos, work on testing and tweaking your sales funnel. Put it out there and see if it converts with your warm market (your warm market are the people who already know you and have built some trust with you so they're actually more likely to buy from you) before you invest hundreds and thousands of dollars into marketing for the sales funnel. If your warm market doesn’t convert, a cold market won’t either. Make sure your funnel is working before you pour money into ads.
Just to be clear, I don’t mean for you to go hire a click funnels expert to set up your funnel for you (because that's exactly what that lady did). She got opt-ins again, but no actual sales because her funnel didn't nurture a relationship.
4: Invest in Personal Growth With Accountability
All small business owners invest in personal growth, it’s great! What you need to make sure of is that it holds an element of accountability.
So many business owners buy books, go to classes, go to events, and because there's no accountability to do anything with what they've purchased, it’s useless. Worse than useless, it’s wasted time and money because it doesn’t get implemented and wasted energy that could have been spent building the business.
Small business owners have a million things pulling on them, especially in the first year. It might feel like you can’t keep your head on straight because you’re pulled in so many directions.
It's part of the first year in business.
But when you invest in personal growth, make sure there’s accountability built in. Get plugged into a mastermind that holds you accountable to show up or hire a coach who is going to call you on the carpet for not showing up and not getting your action items done.
Sitting around, buying a book or going to events or classes that have no accountability to implement things long-term is a waste of time and money -- take that money and put it into something that's actually going to produce results for you.
5: Focus on Sales Activities
You will need to get yourself held accountable to an activity tracker: some way to keep track of the notes for the people that you're following up with. Cataloguing and focusing on how sales activities are going.
Typically, people use what’s called a CRM (Customer Relationship Management System) for this. The one I can’t recommend enough to first year business owners is called Less Annoying CRM. It is a phenomenal tool to help you create a place where you can track your notes without getting overwhelmed by all of the extra stuff that happens when you try and get plugged into a CRM.
Keep this in mind: your job in your first year of business is to keep enough cash coming in so that you can stay afloat. Your job has to stay focused on getting sales in the door so that that money keeps coming in and you’re ready to level up the next year.
6: Document, Document, Document
You are going to want to outsource things in your business. Sooner or later you are going to want to start passing stuff off to other people.
That's normal: it's growing a business. But you need to document three things for the growth of your business.
How Long It Takes: I had one friend would get on his virtual assistant all the time because she would take an hour to complete a task he thought should take 15 minutes. When he sat down to actually do the task for her once, it took him 1 ½ hours which caused him to realize that the frustration he was feeling was his own fault. Documenting how long it takes you to complete a task helps you set realistic expectations for other people doing the same job.
How To Do It: This one’s a bit obvious. But if you have a document that shows how to complete a task, you don’t have to sit down with someone every single time you hand them a job.
How To Tell When It’s Done: Figure out how you’ll be able to know that you outsourced something and that it was completed in a timely manner, to your satisfaction. Then keep track of that so you can go back and reference it as you outsource things.
7: Commit to Completing a Task All The Way
I recently had a conversation with a client whom I’d coached several months back. At the end of our coaching session, we laid out a whole strategy for her to take her business to the next level and differentiate herself from her competitors.
We got back on the phone a few weeks ago and she was deflated, exhausted, and frustrated. The more we talked, the more I realized she didn't actually commit to and work through the strategy we laid out. She worked at it for a week and when that week didn't produce results (in an industry that can take several months to produce clients) she’d dropped the strategies rather than pushing through or tweaking the strategy to adjust and exclude what she found wasn’t working.
That’s not a healthy way to grow your business.
When you commit to doing something, commit to doing it for 90 days -- do it hardcore. If you're trying a prospecting strategy, do it until you reach 100 leads or 90-days. If your strategy can't generate a hundred lead leads in 90 days, then you can cut it off. But giving up on something after only one weekend is selling yourself short and cutting your potential off at the knees.
8: Focus on Eliminating Peaks and Valleys
One of the most important things that I learned in business was the need to streamline the sales process and the fulfillment process.
What happened was that when I had no clients (and therefore no money), I would go into sales mode. But once I started making money, I stopped spending time in sales and therefore all the leads I was developing began dropping off the map. Eventually I finished fulfillment on those coaching clients and the cycle started again.
I want to encourage you to spend your time in this first year looking at how to either streamline fulfillment or removing the sales role from your hands; in essence, beginning to level out those peaks and valleys by helping you only have to focus on one role in your business. When you're getting the business up and running, you're going to have some ups and downs. That's natural, but what you want to do is avoid the serious peaks and valleys: closing $40,000 one month and nothing the next six months or longer.
9: Don't Stress the Small Stuff
Every small business owner, stresses out over getting the correct tax ID, LLC Formation, all the minute little details. I know; I did the same thing.
The result is analysis paralysis -- things like taking two months off of sales to decide which CRM to use.
Here's the thing.
You are going to do it wrong.
You're going to make mistakes
That is part of business.
You can get some advice from people like a CPA or an attorney. But honestly, look into what the purpose of an S Corp versus a C Corp versus an LLC is, then make your best guess and move on. Most of the time, mistakes can be fixed.
When I started the business, I started with the incorrect legal formation for my business. It was easy to fix. It cost a little extra money, but because I had things going, I could afford it.
10: Surround Yourself by Business Owners Who Are Moving Forward
When I started the business, I joined a networking group that was great for a long time. They really helped me grow, but at one point I remember looking around the room and realizing that in two years I had outgrown most of the guys in this room. By continuing to hang out in that room, I was just holding myself back from my potential growth.
Everyone gets to a point where we grow to the level of our peers. So push yourself to get around business owners who are more established and in a better place than you. Spend time with people who are moving their business forward, because they will pull you along with them just out of momentum.
Keeping great people around you makes all the big difference.
Still not sure where to go with things? Check out our Business Builders Basics package that walks you through everything you need at the most basic levels of building your business, to set you up for success and growth!
About the Author:
Stephanie Scheller is a TED speaker, a two-time best-selling author and the founder of Grow Disrupt: a San Antonio based company dedicated to disrupting the way the world does business through training. In just under a decade, Stephanie has been behind the scenes with nearly 2500 small businesses. She has worked in groups and one-on-one to create total business transformation & help business owners live the life they got into business to create!